Suppose this year's dividend of company X is $3. The discount rate on X' stock is 7%:

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a) If dividend growth rate is 3%, what is the price of the company X?

b) If the company's dividends are constant, thus no growth in dividends, what is the price of the company X?

c) List at least four assumptions behind the Gordon-Growth Model.

Related Book For answer-question

Intermediate Financial Management

ISBN: 978-1111530266

11th edition

Authors: Eugene F. Brigham, Phillip R. Daves

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Posted Date: Jul 12, 2023 04:37 AM

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Suppose this year's dividend of company X is $3. The discount rate on X' stock is 7%:

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a To calculate the price of Company X using the GordonGrowth Model when the dividend growth rate is ... View the full answer

Intermediate Financial Management

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